T3D 1.1 Beta 3 - Decal rendering artifacts when a static shape intersects with a decal and terrain - CONFIRMED

(what version are you using?)
Build: 1.1 Beta 3

(what platform/OS did this happen on?)
Platform: Windows Vista 32 Bit (geforce 9800 gtx+)

(where is this bug happening?)
Target: "ingame"

(what is the bug)
Issues: DTS Objects intersecting a terrain that has a blended material on it is visible 'through' the terrain and the dts under the terrain starts zfighting/flickering with the blended terrain materials.

[Edit] actually im not too sure that is what the problem is, it seems to be like a hovering decal but its not a decal... its only at that part of the deathball mission that i can find like it, its like a pssm shadow thats hovering in the air blended with a terrain material flickering like its zfighting, its not a transparency on the terrain itself, its infront of it, look at second picture. apologies for the nubbish report at first lol...


(tell us how to trigger the bug)
Steps to Repeat:
1. Launch deathball
2. find two of the big boulder models that are together, going through the terrain
3. watch the rear side of the boulders as you move around it where they cut through the terrain



after moving the two rocks away, doing a full relight, changing to basic, back to advancedm, another relight, these planes are still there, but they dont seem to be "anything" kinda confused myself here lol...

commencing picture spam of it...


after moving those two rocks away from it, saving the mission, and reloading it, the wierd shadow plane dissapears.